State
of Gujarat etc. Vs. Daya Shamji Bhai etc [1995] INSC 426 (25 August 1995)
Ramaswamy,
K. Ramaswamy, K. Hansaria B.L. (J)
CITATION:
1996 AIR 133 1995 SCC (5) 746 JT 1995 (6) 475 1995 SCALE (5)248
ACT:
HEAD NOTE:
O R D
E R
Delay
condoned.
Leave
granted.
Though
notice has been served on all the respondents, none appears either in person or
through counsel in all the appeals.
Notification
under Section 4(1) of the Land Acquisition Act, 1894 (for short, `the Act') was
published on December
18, 1980 acquiring
large extent of lands for the purpose of irrigation dam No.2 Project. The land
owners had given their consent in writing on March 11, 1983 agreeing to accept the compensation determined by the Land
Acquisition Officer and 25 per cent more thereof and also agreed not to seek
any reference under Section 18. The market value was determined by the
Collector on March 25,
1983, and 25 per cent
in addition thereto was awarded. Respondents were paid in terms of the consent
agreements signed by the respondents and sanctioned by the Superintending
Engineer, Rajkot.
Subsequent
thereto, the respondents sought for reference under Section 18 on April 26, 1986. The Assistant Judge, Rajkot by his
award and decree dated June 29, 1991 enhanced compensation to the rate of
Rs.200/- per are for Bagayat land and Rs.140/- per are for Jirayat land.
Feeling aggrieved, when the appellants filed appeals, the Gujarat High
confirmed the same by the impugned judgment and decree dated July 3, 1992. Thus these appeals by special
leave.
The
only question is whether the claimants of the land are entitled to seek
reference under Section 18 and the civil court can determine higher
compensation. Section 11 (2) of the Act empowers the parties to enter into an
agreement and an award in terms thereof is permissible. In the agreement they
had specifically accepted that owners would receive compensation and 25 per
cent of the compensation in addition and had agreed to forgo their right to
seek reference under Section 18 of the Act. The owners and the Special Land
Acquisition Officer had agreed under Section 11(2) of the Act that the Land
Acquisition Officer would make the award in terms of the contract. Clause 14 of
the agreement reads thus:
"The
land owners will not go to any Court under Section 18 of the Act." In the
award, it is seen that the Land Acquisition Officer while awarding the
compensation, had also worked out the addition of 25% and awarded total
compensation to the land owners. It is not in dispute that they had been paid
accordingly. In the award, the Land Acquisition Officer has specifically stated
that :
"As
discussed in para 9-A and as mentioned in para 9-B, I fix the value of the
lands, under acquisition in this case, for Bagayat Lands at Rs.110/- per are,
for Jirayat Lands at Rs.80/- and for waste lands at Rs.10/- per are and further
order to pay as such. Moreover, in this case, the persons interested has
demanded for 25% consent more. The consent rate is sanctioned by the
Superintending Engineer, Rajkot
Irrigation Circle, Rajkot vide his letter
No.PB/4/General/LAO/1519, dated 25.3.1983 and accordingly I also order to pay
the amount of 25% consequent rate." In view of the above agreement and in
view of the discussion made by the Land Acquisition Officer in the award and working
details given in the annexures made therein, it is clear that the parties
having contracted to receive compensation the question emerges whether they are
entitled to seek a reference. On making an award under Section 11 and issuance
of the notice under Section 12 of the Act, the Collector is enjoined under
Section 31 (1) to tender payment of the compensation awarded by him to the
interested persons entitled thereto to receive the compensation according to
the terms of the award. Under the second proviso to sub- section (2) of Section
31 "no person who has received the amount otherwise than under protest
shall be entitled to make any application under Section 18". The
entitlement to make reference to civil court under Section 18 (1) and within
the period prescribed under sub-section (2) is conditioned upon non-acceptance
of the award. Sub-section (1) of Section 18 makes the matter clear thus:
"Any person interested who has not accepted the award may, by written
application to the Collector, require that the matter be referred by the
Collector for the determination of the Court regarding his objection, be it to
the measurement of the land, the amount of the compensation, the persons to
whom it is payable, or the apportionment of the compensation among the persons
interested." The right and entitlement to seek reference would, therefore,
arise when the amount of compensation was received under protest in writing
which would manifest the intention of the owner of non-acceptance of the award.
Section 11 (2) opens with an non-obstante clause "notwithstanding anything
contained in sub-section (1)" and provides that "if at any stage of
the proceedings, the Collector is satisfied that all the persons interested in
the land who appeared before him have agreed in writing on the matters to be
included in the award of the Collector in the form prescribed by rules made by
the appropriate Government, he may, without making further enquiry, make an
award according to the terms of such agreement. By virtue of sub-section (4),
"notwithstanding anything contained in the Registration Act, 1908, no
agreement made under sub-section (2) shall be liable to registration under that
Act". The award made under Section 11 (2) in terms of the agreement is,
therefore, an award with consent obviating the necessity of reference under
Section 18.
The
Reference Court negatived the contention of the State and its reliance on
agreement of the parties on the ground that since the said agreements were not
registered under Registration Act, they cannot contract out from statute. Therefore
the Reference Court has the power to award higher
compensation. It is seen that in the contract they had agreed to receive
compensation and 25 per cent more in addition thereto. They had also agreed not
to seek any reference under Section 18. In the light of the above, no option is
left to the parties under Section 18 to seek reference. Sub-section (2) of
Section 11 gives right to the parties to enter into an agreement to receive
award compensation awarded under Section 11 in terms of the contract. In fact,
it would be more expeditious to have the dispute sorted out so as to avoid
delay in determination of proper compensation. The contract between the owners
and the Collector in writing of the terms to be included in the award of the
Collector is conclusive and binds the parties.
They
would not be entitled to seek any reference for enhancement of the compensation
required to be adjudicated under Section 23(1) of the Act. It would be seen
that when compensation was received under protest, Section 18 gets attracted.
The
question of awarding interest and statutory benefits arises when the civil
court finds that the amount of compensation awarded to the land owners by the
Collector is not adequate and the prevailing market value is higher than the
market value determined by the Land Acquisition Officer under Section 23(1).
For entitlement to solatium under Section 23(2), "in addition to"
market value the court shall award solatium. Under Section 28, if the court
gets power to award interest, when court opines that the Collector "ought
to have awarded compensation in excess of the sum which the collector did award
the compensation". In other words, valid reference under Section 18
confers jurisdiction on the civil court to consider whether the compensation
awarded by the Collector is just and fair.
Thereafter,
when it finds that the Collector ought to have awarded higher compensation, the
civil court gets jurisdiction to award statutory benefits on higher
compensation from the date of taking possession only. In view of the specific
contract made by the respondents in terms of Section 11(2), they are not
entitled to seek a reference. Consequently, the civil court is devoid of
jurisdiction to go into the adequacy of compensation awarded by the Collector
or prevailing market value as on the date of notification under Section 4(1) to
determine the compensation under Section 23(1) and to grant statutory benefits.
By
operation of Section 11(4), the need for registration of the agreement is
obviated. As seen in the contract, the respondents have forgone their right of
seeking reference in lieu of 25% more than the compensation determined by the
Collector under Section 11(2) of the Act.
In
fact, 25 per cent in addition to the market value determined by the Collector
in his award under Section 11(1) had been paid as the consideration to forgo
reference. Even otherwise, once an agreement was entered by the parties, the
question of objection to receive compensation under protest does not arise. So,
they have no right to seek a reference to the civil court under Section 18 of
the Act.
The
appeals are accordingly allowed. The orders of the reference court as confirmed
by the High Court are set aside but, in the circumstances, without costs.
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